NEW YORK CITY-The strength of the retail sector is forcing some players to look beyond traditional streets and—in continued good news for the segment—create new shopping areas.
The Nolita neighborhood has become an “affordable hip alternative to Soho,” says a new report by CBRE on local retail in the first quarter. “Average asking rents are significantly lower in Nolita than in Soho, so companies like Tory Burch, Rebecca Taylor and Scotch & Soda are among retailers who have opened their first Manhattan stores in Nolita,” says Andrew Goldberg, EVP, CBRE retail group, in an announcement of the report. “Elizabeth Street is Nolita's high street and has average asking rents in the $125-to-$275 per square foot range, while Soho's main corridor of Broadway between Houston and Broome Streets is in the area of $760 for average asking rents and rising rapidly.”
Soho and Nolita almost can't be compared with each other, Goldberg tells GlobeSt.com. “They don't have the same pedestrian traffic or the same amount of people,” he says. “They are just different markets.”
Soho's Broadway corridor saw a 21.2% increase in average asking rents in Q1 2013 from Q4 2012, according to the announcement, second only in Manhattan to Downtown's 25.8% increase in average asking rents to $249 from $198 over the same period of time.
Goldberg isn't surprised by the sharp increases. “We have seen nice increases across the board in Manhattan,” he says. “Retail sales are real strong, property sales are strong, leasing is up, the retail markets are doing great and we've had great tourism; hotel occupancy is high.
“Retail is getting stronger,” Goldberg continues, “all the markets saw an increase or were flat. All the indicators were up last year and that impacted asking rents this year. We're seeing 2007 numbers here.”
Midtown's Fifth Avenue corridor from 49th to 59th Streets, along with Time Square's Broadway and Seventh Avenue corridor from 42nd to 47th Streets, remained the highest retail average asking rents in Manhattan at $2,970 and $2,413 per-square-foot respectively, although those numbers remained flat from Q4 2012 through Q1 2013, the announcement states.
Even with no change, the numbers are still impressive, Goldberg notes. “Fifth avenue is still the strongest market with the highest rents.” A lease signed earlier this month at 693 5th Ave., by fashion designer Valentino, was inked for approximately $2,600 to more than $3,000 per square foot, a new record for the area.
The positive activity supports the assertions made in last week's report by Eastern Consolidated that showed the retail sector's momentum won't be slowing down anyt=
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Rayna Katz
Rayna Katz is a seasoned business journalist whose extensive experience includes coverage of the lodging sector, travel and the culinary space. She was most recently content director for a business-to-business publisher, overseeing four publications. While at Meeting News, a travel trade publication, she received a Best Reporting award for a story on meeting cancellations in New Orleans during Hurricane Katrina.
